What is the meaning of an "umbrella liability policy"?

 

An umbrella liability policy acts as your shield or umbrella when and if the weather turns stormy in your financial life. Such a policy provides protection in case of a lawsuit is leveled against the homeowner or a family member. Depending on the limits specified by the policy, you are covered in case of:

• Any claims made for bodily injury or damage to the property caused by the homeowner or a family member.
• Any claims made for bodily injury that may have occurred on your property or due to specific hazards on the property.
• An auto policy that carries additional coverage for any liabilities related to your automobiles.
• Protection against a host of claims pertaining to personal injury such as libel, wrongful eviction, false arrest, slander, and more.
• Legal defense fees such as your attorney's fee and court related expenditures for a covered loss.

It is important to understand all the provisions of your umbrella liability policy thoroughly because there may be some exclusion under the policy. Your home insurance agent will be able to explain the policy specifications to you completely so you understand what is covered and what is not, which will certainly help satisfy any concerns you may have.